Western Sky Financial, an online loan company based on the Cheyenne River Reservation in South Dakota, cites "unprecedented government interference" as the reason for laying off the majority of its employees in Timber Lake, S.D. and its decision to close its office in Eagle Butte, S.D. next week.
The Federal Trade Commission filed a lawsuit against Western Sky in 2011 alleging illegal collection practices.
Many other states have accused Western Sky of issuing illegal online loans with interest rates as high as 340%. Just in the last month New York, Michigan and Georgia sued the company. The company in a statement said the lawsuits have forced the layoffs.
The company once employed up to 170 workers on the reservation. Company officials expressed hope the firm can rehire employees once all of the court cases are settled.
Last month, the New York Attorney General's office estimated the online lender has issued $38 million in loans in New York alone since 2010, with finance charges reaching $185 million.
Eagle Butte Mayor Stephanie Davidson told Keloland TV News in Rapid City, S.D. that the layoff plans will greatly harm the community and the families of tribal members losing their jobs. "Where are they going to go? They're going to have to move if they want employment or they're going to have to depend on the tribe for help," she said.
